Palomino Enterprises purchased 2,000 shares of its own stock at $8 a share.Later,it reissued the 2,000 shares for $20,000.The effect of the entry to record the sale of treasury stock on the accounting equation includes a(n):

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The stock reissue would be recorded with a debit to Cash for $20,000,a credit to Treasury Stock for $16,000 (or 2,000 shares × cost of $8 per share),and a credit to Additional Paid-in Capital for $4,000 (or $20,000 − $16,000).Total stockholder's equity would increase by $20,000 (or $16,000 + $4,000).

Palomino Enterprises Purchased 2,000 Shares of Its Own Stock at $8